Donald Trump’s plan to slap tariffs on goods entering the United States could leave the UK economy as much as £20billion worse off, analysts have warned.
Trump is thought to be planning to impose taxes of 60 per cent on Chinese products sold to US businesses – as well as 20 per cent levies on all other imports.
Though he has been tipped to give Britain a “trade lane” out of sympathy with Brexit, the Centre for Economics and Business Research (CEBR) has warned his protectionist crackdowns “pose challenges” to the UK.
CEBR says that if Britain doesn’t retaliate to the tariffs, the UK’s GDP could slide by 0.9 per cent by the end of Trump’s second term in the White House.
Trump has been tipped to give Britain a ‘trade lane’ out of sympathy with Brexit
REUTERS
That represents an economic hit worth as much as £20billion by 2029, based on last year’s figures on the size of the British economy.
Meanwhile, further estimates from the National Institute of Economic and Social Research (NIESR) that UK economic growth could drop by 0.7 per cent if Trump imposes 10 per cent tariffs.
The CEBR has pointed to securing a free trade deal with Trump to stave off any potential slump – but also warned that issues over food standards could get in the way, as they did when Trump was last in power.
Economist Sara Pineros said: “The Chancellor faces a pivotal period to act on her pro-growth agenda and position the UK as a competitive destination for investment.
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The CEBR has pointed to securing a free trade deal with Trump to stave off any potential slump
GETTY
“Ultimately, while US tariffs and rising protectionism pose challenges, other proposals under a new Trump administration also present opportunities for the UK to adapt and thrive.
“Without strengthening its approach, the UK risks taking all the pain associated with a Trump presidency without realising the potential gain.”
Immediately after his re-election, Rachel Reeves herself pledged to make “strong representations” to Trump about the damage a protectionist regime would inflict.
Speaking to the Treasury Committee, Reeves said: “We’re not just a passive actor in this.
Reeves herself has pledged to make ‘strong representations’ to Trump about the damage a protectionist regime would inflict
PA
“It’s a trade relationship with the United States and we will make strong representations about the importance of free and open trade.
“The US also benefits… from access to free and open trade with us and other countries around the world, and it’s what makes us richer as societies.”
But she noted that there were still “another couple of months before the inauguration” to make headway on UK-US trade.